In January,Pizza Company bought pizza ingredients on account for $100,with payment due to the supplier in 90 days.The pizza ingredients were used for pizzas made and delivered in January.In which month should Pizza Company record the cost of the pizza ingredients as an expense?
A) February
B) March
C) January
D) April

Question

Quizplus · Accepted Answer

The cost of the pizza ingredients should be recorded as an expense in the month they were used, which in this case is January. Even though Pizza Company has 90 days to pay the supplier, the expense should be recorded when it was incurred, not when the payment is made.

In January,Pizza Company Bought Pizza Ingredients on Account for $100,with